Money Transfer Process – Sending and Receiving Money

Money transfer refers to the transfer of money from one person or entity to another. Today, money transfer services are offered by almost all banks and some retail Payment Service Providers (PSP) like Xpress Money, Western Union, PayPal etc.

The process of money transfer varies depending upon whether the service is provided by a bank or a PSP.

Money Transfer Process in Banks

Banks offer money transfers in the form of wire transfers, online transfers and mobile transfers. One essential feature of bank transfers is that the remitter (the person transferring the money) and the beneficiary (the person/entity receiving the money) both have bank accounts to initiate and receive the transfer, respectively.

Such transfers can be to accounts within the same bank, to accounts to banks within the same country and to accounts in different countries. The remitter needs to provide complete details of the beneficiary and the beneficiary’s bank account details including the bank name, branch address, currency of transfer, branch’s special IBAN or SWIFT code etc.

The beneficiary will automatically get the transferred amount into his account.

Money Transfer Service offered by Payment Service Providers

PSPs provide alternative, competitively-priced money transfer services that have more facets to it than the money transfer service provided by banks. For instance, unlike banks, money transfer via PSPs eliminate the need of having a bank account or even an account with the PSP, for both the remitter and the beneficiary.

How does the remitter transfer money?

♦ By walking into any branch of the PSP.

♦ By calling the Payment Service Provider’s customer service.

♦ Initiating an online transfer through the PSP’s website.

♦ Some PSPs also enable mobile transfers.

How does the remitter fund the transfer?

♦ By paying cash at the Payment Service Provider’s counter.

♦ Through debit from a bank account or an account with the PSP.

♦ By using a debit or a credit card.

♦ By using “mobile money”.

How does the beneficiary receive the funds?

♦ The beneficiary can receive the funds directly into his bank account, mobile wallet, debit/credit card or his account with the PSP.

♦ A few PSPs like Xpress Money offer door-delivery of transferred funds (minus a fee) to the beneficiary.

♦ “Cash-to-cash” transfer is one of the most popular ways of transferring money and works as follows:

▫ The remitter walks into any location of the PSP, presents his identity proof, pays for the transfer and provides complete details of the beneficiary.

▫ He receives a special pin-number or code.

▫ The remitter communicates this pin/code to the beneficiary.

▫ The beneficiary visits a branch of the PSP convenient to him, in his city/ country.

▫ The beneficiary presents a valid identity proof and the pin/code and receives the money.

An SMS notifications to the sender on completion of the process adds  a level of security/authentication to the entire process.


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